I bought at peak, right?

I'd say we are past the peak most places, so wouldn't say today.

Generally, peak was maybe 2006. Though its area by area - earlier peaks in poorer communities, late in wealthier ones.

I'd guess that prices will hold pretty steady through march - its thin trading anytime, and not much inventory now. People will put things on optimistically for spring market, and then we will start to see price drops.

Should you buy? It's simple: If you have a stable job, a stable family, decent credit, 20% for a downpayment, find a decent home in a decent neighborhood where the mortgage won't be more than 30% of your income, and plan to live there for at least 10 years ... GO AHEAD! It's a great time to buy.

If you're planning to stay there for 10+ years, and love the house, then who cares if it goes down in value a bit..?

Mike S, you must be a starving realtor, why buy now when prices will be 30% in the next 3 years?

I need help figuring out how much of my income should be devoted to owning a home. As a 1st time prospective homebuyer I don't want to over extend my family's finances at all. Some people say 33% of your gross income and others say 33% of your Take-Home income... What should I be limiting my housing expense at? Ball park we make $105k combined with zero debt of any kind excpet for 2 more year on a car loan which we owe $6,000. Any advice would be greatly appreciated!

I was at an open house for a Short Sale, Tons of activity. The reason why there was a lot of activity and multiple offers was very revealing. The house was in Norfolk, MA it sold for $410 in 2004 3 bed/2.5 bath, 1650 sq ft, saltbox colonial. It was listed this fall for $429k then $415 then $385 before the Bank stepped in and negotiated a short sale with the owner. They relisted the house last week for $300,000.... Thats why there was lot of interest and it was hillarious because all the prospective buyers were just like me (28 married 1st time homebuyers looking for houses in the $275-300k range) and all of us brought our parents! It was actually quite cool to see it. But to my point... There is a lot of demand for nice houses that dont need a ton of work with 3bed 2 baths at 300k. Thats the sweet spot for first time homebuyers! $275k-$300k. We passed on the house becauce it was too far from our jobs. So we wait untill the Spring where we should see a lot more inventory and hopefully sellers get into the 275-300k range!

at the end of the day, ARM's are not bad loans when they are fully understood. Remember, there is but 1 country in the world that has a 30 year fixed rate mortgage and that country also subsidizes your mortgage payment !!!
For what to spend every month, it doesnt matter what you can be qualified for, you have to be comfortable spending it. I know a lot of people that could be qualified to spend 2 or 3x what they currently do on a mortgage but would never be able to afford it mentally.
Even today, Fannie & Freddie will allow debt ratios over 50%, too bad the mortgage insurance companies won't go over 45%. Rumors of both of these being reduced further in the coming months.
FHA will allow up to 55% debt ratios today as well.

In the end, we need to look at our own situation and do what we are comfortable with.

Matt - 275-300k is a nice spot for you. 350k would be max, and is pushing it.

ARMS are bad loans for most people. Yes, the 30 year fixed is a rare mortgage, but we've got a good thing in this country.

An Arm is implicitly an interest rate derivative product. Most people should not be investing in derivatives. Most people should not be making bets on interest rates they don't understand.

How to distinguish between those who do, and those who don't? I'm not sure. But the evidence seems to be that restricting the choice of those like me is better for the country as a whole than giving people enough rope to hang themselves.

(As an aside, ARMS aren't playing near the role in this mess that I thought they would. That's pure blind chance though)

ARMS are not causing too many problems because the rates that they are tied to have been kept low. A popular index, the 1 yr and 6 mo LIBOR are still competitive with 30 yr fixed. The mortgages resetting are not seeing the rate increase that was expected because the indexes have not risen to unaffordable limits (except for that brief period in Sept.). Until the indexes rise and create problems with the resets we will not see the mad push to refi those mortgages. At that point we will have another cascade of foreclosures/shortsales because of the inability to refi due to falling values..